Bellin Hospital Eliminates the Guesswork From Price Negotiations

As health care providers nationwide strive to eliminate costs from their system and save more on supplies, Bellin Hospital, a 167-bed, acute-care hospital in Green Bay, Wis., is using VHA PriceLYNX as its primary investigative product research tool to identify cost-saving opportunities related to product and price fluctuation and enhance its bottom line. Bellin Hospital is a member of VHA Inc., the national health care network that helps members cut costs and improve supply chain management beyond what they can achieve on their own.

When new products are introduced in health care and other markets, prices are typically high. As product demand decreases, prices generally begin to fall. While it can be time consuming and sometimes challenging, staying on top of fluctuating prices and understanding pricing and performance can ultimately be financially rewarding for hospitals.

"When drug-eluting stents hit the market, prices on bare-metal stents dropped significantly," says John Rocheleau, Bellin Hospital's vice president of system support services. "We had to revisit it every three months to try and determine how fast the price was dropping and what the rest of the market was paying."

Witnessing a demonstration of VHA PriceLYNX, staff members at Bellin Hospital saw firsthand that a clear view of industry pricing had been missing from their daily purchasing activity and how powerful data could be. Bellin Hospital has now integrated VHA PriceLYNX into its value analysis efforts (excluding drugs) and has incorporated it into the hospital's weekly routine.

"We knew there was opportunity for us, but we didn't know exactly how far that opportunity would go," continued Rocheleau. "VHA PriceLYNX allows the team to watch quarter by quarter where prices are and it gives them the data to support their negotiations with suppliers."

Backed by the industry's largest spend database, which currently reflects more than $60 billion in non-salary expenses, VHA's industry leading price benchmarking service couples a user-friendly interface with a resource dedicated to helping subscribers identify, act on and track cost reduction activity.

"Access to a timely, accurate and robust set of data is key to determining the spending performance of any organization," says Justin Hibbs, senior director, analytics strategy and marketing, at VHA. "It's what decision making in today's health care environment is all about -- data provides direction and direction leads to action and subsequent bottom line savings."

"We realized immediately the power of data," says Kayne Coleman, Bellin's team leader, procurement, logistics and materials management. "It's definitely become part of my weekly process -- in fact, the first thing I do every Monday is check out the price index on VHA PriceLYNX."

VHA PriceLYNX is just one component of VHA LYNX, VHA's robust suite of analytical solutions that help hospitals cut costs and improve supply chain management. This powerful array of products and services also includes VHA DataLYNX, VHA Physician PreferenceLYNX, a contract catalog, plus supplemental services that further improve members' cost saving opportunities such as spend analysis, services analysis and pharmacy analysis.

About VHA - VHA Inc., based in Irving, TX, is a national network of not-for-profit health care organizations that work together to drive maximum savings in the supply chain arena, set new levels of clinical performance and identify and implement best practices to improve operational efficiency and clinical outcomes. In 2010, VHA delivered record savings and value of $1.7 billion to members. Formed in 1977, VHA serves nearly 1,350 not-for-profit hospitals and more than 30,000 non-acute care providers nationwide, coordinating delivery of its programs and services through its 16 regional offices. VHA has been listed as one of the best places to work in health care by Modern Healthcare since 2008 and one of the best places to work in IT by Computer World since 2007.